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TheSignalyst
May 26, 2022 9:54 AM

BTC - Reversal OR Continuation? 

Bitcoin / U.S. dollarBitstamp

Description

The last couple of days / weeks were truly boring.

BTC has been stuck inside our gray range, and the last couple of days, that range is contracted to form range within a range.

The longer the consolidation, the more aggressive the movement would be after the breakout. So be prepared!

The question is... which way?

Scenario 1: Trend Reversal
For the bulls to take over, we need a daily momentum candle close above the upper bound / gray zone.

In this case, a movement till the upper resistance zone 38k - 40k would be expected.

Scenario 2: Trend Continuation
For the bears to take over, we need a daily momentum candle close below the lower bound / gray zone.

In this case, a movement till the lower demand zone resistance 18k - 20k would be expected.

Which scenario do you think is more likely to happen? and Why?

Always follow your trading plan regarding entry, risk management, and trade management.

Good luck!

All Strategies Are Good; If Managed Properly!
~Rich
Comments
Commodore3


I believe we will see something like this. A stop hunt at the top of the range, followed by the real capitulation all the way down to 23 - 20k. My thoughts though
TheSignalyst
@Commodore3, very possible yes!
CTDave
Imo, it's bullish in the short term. It's just not possible for it to still drop after so much selling. With eight straight weeks of selling, MACD, RSI, Momentum indicators, and much more showing that BTC is bullish, I don't believe that it's going straight to 18k or 10k at this point. Thank you for the post! Please check out my post:
TheSignalyst
@CTDave, that's it Dave. now I know what you mean by your comment on KucoinS ;) glad to hear from you here too!
UnknownUnicorn39357899
I believe I speak for most traders when I state I hope the bulls will take over however, I don't see it (winter might just be here). From all current news, posts and insights (also opinions to a degree) the current fundamentals and macroeconomics are making it a lot easier for those bears to take over at this point in time along with this length on consolidation.

Your technicals are amazing and I'm scared of an aggressive trend continuation as depicted in scenario 2. Based on previous market patterns, trends and Hx, a bear market will help consolidate and correct cryptocurrencies which will only strengthen BTC in the long run. I see both the positives and negatives.

These low prices are making us hurt and while a definition of bear is to: "endure (an ordeal or difficulty)" I am approaching with a different mindset: Audentis Fortuna iuvat ("Fortune favours the bold").

Even though I believe this trend could continue for a significant amount of time no matter the case as investors I hope we can all capitalise together the next time the bulls take over.
TheSignalyst
@mjpprivate, thank you for taking the time to share your thoughts! I totally agree; since we are overall bearish, chances are that the bears will remain in control... and as you mentioned last, it would be a good opportunity to capitalize more around each rejection zone like 20k and 10k zones.
VincePrince
Great view.
TheSignalyst
@VincePrince thank you Vince
CobraVanguard
Loving it 👍🏼
TheSignalyst
@TheTreeTrader amazing
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